Here's a link to the table I'm working on.
https://drive.google.com/open?id=11xxNJBIXnwgfm8E5Q27U5wF8xbMMPeB_
note:
I'm expecting either a 61.8% or a 78.6% Fibonacci retracement so I'm using those percentages.
I'm trying to calculate the return of a strategy where you short the coming bear market with margin for the first 40% of the decline, and then go marginless for the remainder of the decline.
Then in the new Bull Market Going long with margin for the first 150% or 300% then going marginless for the remaining 111.8% or 167.3%
The problem I'm having is when I increase the 300% to 400% my final number should get bigger because it means I'll be using margin for an extra 100% increase. so clearly the value should be higher. I'm pretty sure I know what the problem is but I don't know how to do the formula.
When I'm increasing the 300 to 400 it decreases the amount I'm multiplying the second part of the move by.
1st part - ($10,000 plus your interest from the bear) times 3 with margin, times 300%
2nd part - (Initial investment+interest earned in part 1 above)*(467.3-300) (which = 167.3)
so ($10,000+int)*(167.3)
But when I increase the 300 to 400 I'm saying
1st part - ($10,000 plus your interest from the bear) times 3 with margin, times 400%
2nd part - (Initial investment+interest earned in part 1 above)*(467.3-400) (which = 67.3)
so ($10,000+int)*(67.3)
Which isn't right in either case. what I need to do, is use a compounding formula to take a daily average from the average I'm using/expecting. that way the change isn't so abrupt and using an inaccurate multiplier.
I provided a link above. Thanks to anyone that even tries to understand and solve this.
Thanks for your time. It's generous of you to help someone you'll never meet. It is appreciated.
https://drive.google.com/open?id=11xxNJBIXnwgfm8E5Q27U5wF8xbMMPeB_
note:
I'm expecting either a 61.8% or a 78.6% Fibonacci retracement so I'm using those percentages.
I'm trying to calculate the return of a strategy where you short the coming bear market with margin for the first 40% of the decline, and then go marginless for the remainder of the decline.
Then in the new Bull Market Going long with margin for the first 150% or 300% then going marginless for the remaining 111.8% or 167.3%
The problem I'm having is when I increase the 300% to 400% my final number should get bigger because it means I'll be using margin for an extra 100% increase. so clearly the value should be higher. I'm pretty sure I know what the problem is but I don't know how to do the formula.
When I'm increasing the 300 to 400 it decreases the amount I'm multiplying the second part of the move by.
1st part - ($10,000 plus your interest from the bear) times 3 with margin, times 300%
2nd part - (Initial investment+interest earned in part 1 above)*(467.3-300) (which = 167.3)
so ($10,000+int)*(167.3)
But when I increase the 300 to 400 I'm saying
1st part - ($10,000 plus your interest from the bear) times 3 with margin, times 400%
2nd part - (Initial investment+interest earned in part 1 above)*(467.3-400) (which = 67.3)
so ($10,000+int)*(67.3)
Which isn't right in either case. what I need to do, is use a compounding formula to take a daily average from the average I'm using/expecting. that way the change isn't so abrupt and using an inaccurate multiplier.
I provided a link above. Thanks to anyone that even tries to understand and solve this.
Thanks for your time. It's generous of you to help someone you'll never meet. It is appreciated.